DraftKings Inc. (DKNG) Intrinsic Value & DCF Valuation
Gambling, Resorts & Casinos · NASDAQ
Current Price
$23.35
Intrinsic Value
$33.87
+31.1% margin of safety
What Is DraftKings Inc.'s Intrinsic Value?
As of 2026-07-30, the base-case DCF model estimates the intrinsic value of DraftKings Inc. (DKNG) at $33.87 per share, compared with a market price of $23.35, a margin of safety of +31.1%. The base case assumes 12.8% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $26.94 to $41.81. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is DraftKings Inc. (DKNG) Undervalued?
At the current price of $23.35, DKNG trades well below the base-case intrinsic value estimate, a margin of safety above 30%. By this model the stock looks undervalued, but verify the growth assumptions match your own view before acting.
COMPETITIVE MOAT
↑Brand Recognition and Customer Loyalty
DraftKings has cultivated a strong brand in the competitive US sports betting market. This recognition fosters customer loyalty and repeat engagement, creating a sticky user base.
↑Data Advantage and Personalization
The company leverages vast amounts of user data to personalize offerings and promotions. This data-driven approach enhances user experience and retention, a key differentiator.
↑Scale and Operational Efficiency
As a leading operator, DraftKings benefits from economies of scale in marketing, technology, and customer acquisition. This allows for more efficient operations and potentially better margins.
INVESTMENT RISKS
↓Evolving Regulatory Landscape
Changes in state or federal regulations could negatively impact DraftKings' operations, profitability, or market access. This includes potential restrictions on advertising or betting types.
↓Dependence on Key Sports Seasons
Revenue is heavily influenced by the timing and popularity of major sporting events. A less engaging season or unexpected event cancellations could significantly impact financial performance.
↓Technological Disruption and Cybersecurity Threats
The company relies on robust technology infrastructure. Emerging technologies or significant cybersecurity breaches could disrupt operations and damage customer trust.
Base case
DKNG base case valuation
Intrinsic Value
$33.87
Margin of safety
+31.1%
Expected annual return
+7.7%
Base case assumptions: 12.8% annual growth, 10.0% discount rate, 17x exit multiple, 5 year projection. Data as of 2026-07-30.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the DKNG valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for DraftKings Inc. respond.
Open DCF Calculator for DKNGCompany Overview
DraftKings Inc. operates as a leading digital enterprise specializing in sports entertainment and gaming. The company provides sophisticated multi-channel sports betting and gaming technology solutions to operators across 17 countries, facilitating diverse entertainment experiences. Directly, DraftKings manages its own iGaming services under the DraftKings brand in five U.S. states, and separately operates Golden Nugget Online Gaming, another iGaming offering, in three states. Its Sportsbook platform is accessible for both mobile and physical wagers in 18 U.S. states, all in compliance with local regulations. Beyond traditional betting, DraftKings offers its daily fantasy sports product globally in six countries, spanning 15 different sports disciplines. Further diversifying its portfolio, the company has established DraftKings Marketplace, a user-friendly digital collectibles platform featuring curated NFT releases and supporting secondary trading. It also possesses Vegas Sports Information Network (VSiN), a multi-platform content and broadcasting entity. Established in 2011, DraftKings Inc. maintains its headquarters in Boston, Massachusetts.
Financial Metrics — DKNG Stock Valuation Data
Revenue/Share (TTM)
$12.91
FCF/Share (TTM)
$1.39
ROIC (TTM)
1.0%
ROE (TTM)
7.9%
P/FCF
17.1x
EV/EBITDA
31.1x
FCF Yield
5.86%
Debt/Equity
3.17x
Based on trailing twelve-month data, DKNG shows a free cash flow per share of $1.39 and a ROIC of 1.0%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 17.1x and FCF yield of 5.86% are important context metrics when evaluating DKNG's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of DKNG?
DraftKings Inc. currently generates $1.39 in free cash flow per share. At the current price of $23.35, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is DKNG undervalued?
DKNG trades at a P/FCF ratio of 17.1x with a free cash flow yield of 5.86%. This P/FCF is in a moderate range. However, whether DKNG is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value DKNG stock using DCF?
To perform a DCF valuation on DraftKings Inc.: (1) Start with the trailing free cash flow per share ($1.39) as the base, (2) project future FCF growth over 5-10 years based on Gambling, Resorts & Casinos industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting DKNG's risk profile — with a debt-to-equity of 3.17x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to DKNG?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For DraftKings Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Gambling, Resorts & Casinos trends, then discounting those amounts to today's dollars. DKNG's ROIC of 1.0% means the company's return on invested capital sits below the level that typically clears its cost of capital.
How does WACC affect DKNG stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For DKNG, with a debt-to-equity ratio of 3.17x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 31.1x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See DKNG PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Consumer Cyclical valuationsDCF and P/E value DKNG with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-30. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.